Facebook is testing the addition of Groupon-style discount offers to its Facebook Places location feature, according to a report from All Facebook, which based its conclusions on an email that a company said it received from the social network approving such a deal. Under the terms as described by this anonymous source, the retailer would offer a free product to a user if three of their friends checked in — or were tagged — at a specific location via Facebook Places. If true, such offers would bring the social network into direct competition with Groupon and other group-discount services.
Although there have been some questions raised about the authenticity of the email (based in part on the use of the term “Facebook followers” instead of the term “fans”), the idea that Facebook would tie discounts to its Places feature makes a lot of sense. As the social network tries to come up with more offerings for advertisers and merchants that leverage its 500-million-strong userbase, combining its new location-based feature with a pitch to retailers seems like a natural. Some businesses have experimented with offers for users who check in via Foursquare, but so far the location-based discount is a potential marketing feature that remains relatively untapped.
If Facebook was to bring the weight of its vast userbase to bear on that market, it would definitely have an impact on both Foursquare and Groupon, as well as other similar group-buying services such as LivingSocial, which I wrote about recently. While Groupon has been growing at a dramatic rate, thanks in part to the more than $160-million in venture financing it has received from a number of prominent VC funds — including Russian holding company Mail.ru (formerly known as Digital Sky Technologies) — there have also been increasing signs of competition in the space, including the launch of a similar group-discount feature from Walmart (s WMT) called CrowdSaver, which is offered through Facebook.
Groupon, meanwhile, is continuing to expand its reach: it has reportedly signed an agreement with Yahoo (s yhoo) to do a global distribution deal, and has signed similar agreements with eBay (s ebay) and Ning. There have also been rumors that Yahoo is interested in acquiring the company for as much as $2 billion